Review: Ratan Tata: A Life by Thomas Mathew
While the author’s admiration for his subject is evident, the book also presents details of the challenges that the Tata Group faced during its rapid growth through Ratan Tata’s serial foreign acquisitions
Thomas Mathew’s biography of Ratan Naval Tata (RNT) is an easy and engrossing read. It is by far the most authoritative and comprehensive biography of RNT. The book is based not just on rigorous research of the existing Tata archives in Mumbai, Pune and Jamshedpur, but a treasure trove of documents painstakingly gathered by the author which were not even seen by many Tata insiders. These were supplemented by several hundreds of hours of interviews by the author with family members, friends, peers, colleagues and, above all, through unprecedentedly extensive personal interactions with his illustrious subject.
While meticulously documenting the process of the consolidation and coordinated functioning of the Tata Group and its evolution into India’s largest and most diversified global conglomerate, the author offers many fascinating insights on RNT’s private life, his personality and outlook, his dreams and aspirations and his setbacks and frustrations. These help the reader to better understand him as a warm, compassionate and yet complex human being.
What set RNT apart in a class of his own was his unwavering adherence, often under very difficult circumstances, to the Tata legacy of impeccable integrity and probity and an abiding belief that its stakeholders were not only its owners and shareholders, but its employees, local communities and the nation as a whole. Moreover, as underlined by RNT, “no success or achievement in material terms was worthwhile unless it was by fair and honest means”.
The author’s deep respect and admiration for his subject is evident in the book. However, it is equally clear that the author’s detailed coverage of the major challenges and milestones during the rapid growth of the Tata Group through RNT’s serial foreign acquisitions from the turn of the century is remarkably dispassionate and balanced. After buying Tetley Tea in 2000, making TCS public in 2004, RNT rapidly extended the Group’s global reach by acquiring the Anglo-Dutch steel giant Corus in 2007, General Chemicals in 2008 and the iconic Jaguar Land Rover brands later the same year from Ford, which had acquired these at more than double the cost.
The author points out that the differences between RNT and his successor, Cyrus Mistry, which unfortunately later played out in public, were basically fundamental divergences of outlook and approach. One tended to portray the challenges posed by some of these acquisitions in the wake of the unanticipated 2008 financial crisis, as “hot spots” and negative legacy issues inherited from his predecessor and was either mesmerised into inaction or proposed hasty knee jerk remedial actions which aggravated the problems. The other’s approach was to formulate bold turnaround strategies, with clear goals and corresponding capital allocations, aimed at converting short term challenges into opportunities for growth.
Apart from Tata Motors and Tata Steel, another “hotspot” was Tata TeleServices, in part due to the partnership agreement entered into in 2008 with NTT Docomo which invested US$ 2.2 billion for a 26% shareholding. There was a clear exit provision providing for 50% of the investment amount in the event of a failure to meet performance targets. While his successor wanted to avoid or delay the large payment due to the Japanese company’s on account of RBI restrictions, RNT felt that the failure of a Tata company to honour its commitments on domestic regulatory or technical grounds would cause reputational damage not only the Tata Group but the larger national interest of preserving a fair foreign investment environment in India.
The book rightly portrays RNT as a nationalist, who like JRD Tata, proudly retained his Indian citizenship throughout his lifetime. He was convinced that what was good for India was good for the Tatas. He believed in free markets and private enterprise and that our national development goals would be best promoted by progressive removal of protectionist measures and enhanced international competitiveness of Indian companies. As the author concludes, when the layers of RNT’s personality are unpeeled for history, he may emerge as a “capitalist who was driven, paradoxically, by the need to fulfil the goals of an implacable socialist heart”.
RNT’s passing in October this year marked the end of an era for the Tatas and for Indian industry. Yet author brings out how he focused on succession planning for ensuring continued commitment to Tata values and the future readiness of the Group’s flagship holding company. He had added new Directors to the Board of Directors before steering the process of appointing Natarajan Chandrasekaran as Chairman & CEO of Tata Sons. The wisdom of the inspired choice of this dynamic and action oriented “Tata lifer” was borne out in more than full measure. In the past seven years the Tata Group’s revenues have more than doubled from US$ 79.5 billion to UD$ 167.5 billion; Profit After Tax grew four-fold from US$ 3.4 billion to US$13.8 billion, and the Group Market Cap increased phenomenally from US$101 billion to US$407 billion, significantly outperforming the BSE and NSE which grew by 2.7 times.
RNT chose not to initiate the election of his successor as Chairman of the Tata Trusts. However, in his twilight years he had added new Trustees of eminent status as well as all the remaining members of the Tata family. The election of Noel Tata as Chairman of the Tata Trusts and his induction in the Board of Directors of Tata Sons augurs well for the future.
Ronen Sen is a retired diplomat and former Independent Director of Tata Sons
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